EXECUTIN COPY
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MBIA INSURANCE CORPORATION,
as Insurer
▇▇▇▇▇▇ CAPITAL,
as Seller
STRUCTURED ASSET SECURITIES COPORATION,
as Depositor
and
U. S. BANK NATIONAL ASSOCIATION,
as Trustee
INSURANCE AGREEMENT
$21,457,000
First Nationwide Trust 1999-1
Structured Asset Securities Corporation
Mortgage Pass-Through Certificates,
Series 1999-1
Class 2-A3 Certificates
Dated as of February 1, 1999
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TABLE OF CONTENTS
Page
Article I
DEFINITIONS
Section 1.01. General Definitions................................................................................1
Section 1.02. Generic Terms......................................................................................3
Article II
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.01. Representations, Warranties and Covenants of the Seller and the Depositor..........................4
Section 2.02. Representations, Warranties and Covenants of Trustee...............................................8
Article III
THE POLICY; REIMBURSEMENT; SECURITY
Section 3.01. Agreement To Issue the Policy.....................................................................10
Section 3.02. Conditions Precedent to Issuance of the Policy....................................................10
Section 3.03. Payment of Fees and Premium.......................................................................11
Section 3.04. Payment Procedure.................................................................................11
Section 3.05. Reimbursement and Additional Payment Obligation of the Seller
and the Depositor.....................................................................................11
Section 3.06. Indemnification by the Seller and the Depositor...................................................12
Article IV
FURTHER AGREEMENTS
Section 4.01. Effective Date; Term of Agreement.................................................................13
Section 4.02. Waiver of Rights Further Assurances...............................................................14
Section 4.03. Obligations Absolute..............................................................................14
Section 4.04. Assignments; Reinsurance; Third-Party Rights......................................................14
Section 4.05. Liability of Insurer..............................................................................15
Section 4.06. Subrogation.......................................................................................15
Article V
DEFAULTS; REMEDIES
Section 5.01. Defaults..........................................................................................15
Section 5.02. Remedies; No Remedy Exclusive.....................................................................16
Section 5.03. Waivers...........................................................................................16
Article VI
MISCELLANEOUS
Section 6.01. Amendments, Changes and Modifications.............................................................17
Section 6.02. Notices...........................................................................................17
Section 6.03. Severability......................................................................................18
Section 6.04. Governing Law.....................................................................................18
Section 6.05. Consent to Jurisdiction and Venue, Etc............................................................18
Section 6.06. Consent of Insurer................................................................................19
Section 6.07. Counterparts......................................................................................19
Section 6.08. Headings..........................................................................................19
Section 6.09. WAIVER OF TRIAL BY JURY...........................................................................19
Section 6.10. Entire Agreement..................................................................................19
Section 6.11. Third Party Beneficiary...........................................................................19
INSURANCE AGREEMENT
THIS INSURANCE AGREEMENT is made as of February 1, 1999 by and among MBIA
INSURANCE CORPORATION (the "Insurer"), ▇▇▇▇▇▇ CAPITAL, a Division of ▇▇▇▇▇▇
Brothers Holdings Inc., as Seller (the "Seller"), STRUCTURED ASSET SECURITIES
COPORATION, as Depositor (the "Depositor"), and U.S. BANK NATIONAL ASSOCIATION,
a national banking association, in its capacity as trustee under the Trust
Agreement (the "Trustee").
RECITALS:
WHEREAS, the Trust Agreement dated as of February 1, 1999 by and between
the Depositor and the Trustee (the "Trust Agreement") relating to the
$21,457,000 First Nationwide Trust 1999-1, Structured Asset Securities
Corporation Mortgage Pass-Through Certificates, Series 1999-1 Class 2-A3
Certificates (the "Insured Certificates") provides for, among other things, the
issuance of mortgage backed certificates, representing fractional ownership
interests in the trust estate (the "Trust") established thereby;
WHEREAS, the Depositor has requested that the Insurer issue its
certificate guaranty insurance policy (the "Policy") to guarantee payment of
Insured Payments (as defined in the Policy) to the Trustee for the benefit of
the Owners of the Insured Certificates upon such terms and conditions as were
mutually agreed upon by the parties and subject to the terms and the conditions
of the Policy;
WHEREAS, the parties hereto desire to specify the conditions precedent to
the issuance of the Policy by the Insurer and to provide for certain other
matters;
NOW, THEREFORE, in consideration of the premises and of the agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. GENERAL DEFINITIONS. The terms defined in this Article I
shall have the meanings provided herein for all purposes of this Agreement,
unless the context clearly requires otherwise, in both singular and plural
form, as appropriate. Capitalized terms used in this Agreement but not
otherwise defined herein will have the meanings assigned to such terms in the
Trust Agreement.
"Agreement" means this Insurance Agreement dated as of February 1, 1999,
including any amendments or any supplements hereto as herein permitted.
"Business Day" means any day other than (i) a Saturday or a Sunday (ii) a
day on which the Insurer is closed or (iii) a day on which banking institutions
in New York City or in the city in which the corporate trust office of the
Trustee under the Trust Agreement is located are authorized or obligated by law
or executive order to close.
"Commitment" means the Commitment, dated February 24, 1999 between the
▇▇▇▇▇▇ Brothers, Inc. and the Insurer, relating to the Insured Certificates.
"Date of Issuance" means the date on which the Policy is issued as
specified therein.
"Event of Default" means any event of default set forth in Section 5.01
hereof.
"Financial Statements" means, with respect to the Seller and the Depositor
the balance sheets and the statements of income and retained earnings and the
notes thereto.
"Late Payment Rate" means the rate of interest publicly announced by
Citibank, N.A. at its principal office in New York, New York as its prime rate
(any change in such prime rate of interest to be effective on the date such
change is announced by Citibank, N.A.) plus 3%. The Late Payment Rate shall be
computed on the basis of a year of 365 days calculating the actual number of
days elapsed. In no event shall the Late Payment Rate exceed the maximum rate
permissible under law applicable to this Agreement limiting interest rates.
"Material Adverse Change" means, in respect of any Person, a material
adverse change in the ability of such Person to perform its obligations under
any of the Transaction Documents.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., a Delaware corporation,
and any successor thereto, and, if such corporation shall for any reason no
longer perform the functions of a securities rating agency, "Moody's" shall be
deemed to refer to any other nationally recognized rating agency designated by
the Insurer.
"Offering Document" means the Prospectus dated January 15, 1999 and the
Prospectus Supplement thereto dated February 18, 1999 of the Depositor in
respect of the Insured Certificates (and any amendment or supplement thereto)
and any other offering document in respect of the Insured Certificates prepared
by the Depositor that makes reference to the Policy.
"Owner" means each Holder (as defined in the Trust Agreement) of an
Insured Certificate who, on the applicable distribution date, is entitled under
the terms of the Insured Certificates to payment thereunder.
"Person" means an individual, joint stock company, trust, unincorporated
association, joint venture, corporation, business or owner trust, limited
liability company, partnership or other organization or entity (whether
governmental or private).
"Premium" means the premium payable in accordance with Section 3.03
hereof.
"Premium Percentage" shall have the meaning set forth in paragraph 1(a) of
the Commitment.
"Registration Statement" means the Registration Statement on Form S-3 of
the Depositor relating to the Certificates.
"Securities Act" means the Securities Act of 1933, including, unless the
context otherwise requires, the rules and regulations thereunder, as amended
from time to time.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
including, unless the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.
"Servicing Agreement" means the Seller's Warranties and Servicing
Agreement dated as of February 1, 1999 between the Seller and the Servicer,
including any amendments and supplements thereto as therein and herein
permitted.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and any successor thereto, and, if such
corporation shall for any reason no longer perform the functions of a
securities rating agency, "S&P" shall be deemed to refer to any other
nationally recognized rating agency designated by the Insurer.
"Term of the Agreement" shall be determined as provided in Section 4.01
hereof.
"Transaction" means the transactions contemplated by the Transaction
Documents, including the transaction described in the Prospectus Supplement.
"Transaction Documents" means this Agreement, the Commitment, the Trust
Agreement, the Servicing Agreement, the Mortgage Loan Sale and Assignment
Agreement, the Underwriting Agreement, the Offering Document and the
Certificates.
"Trust Agreement" means the Trust Agreement dated as of February 1, 1999
between the Depositor and the Trustee, including any amendments and supplements
thereto as therein and herein permitted.
"Underwriter" means ▇▇▇▇▇▇ Brothers Inc.
Section 1.02. GENERIC TERMS. All words used herein shall be construed to
be of such gender or number as the circumstances require. This "Agreement"
shall mean this Agreement as a whole and as the same may, from time to time
hereafter, be amended, supplemented or modified. The words "herein," "hereby,"
"hereof," "hereto," "hereinabove" and "hereinbelow," and words of similar
import, refer to this Agreement as a whole and not to any particular paragraph,
clause or other subdivision hereof, unless otherwise specifically noted.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.01. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER AND
THE DEPOSITOR. Each of the Seller and the Depositor, represents and warrants
to, as of the Date of Issuance, and covenants with, the Insurer as follows:
(a) Due Organization and Qualification. Each of the Seller and the
Depositor are a corporation, duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation.
Each of the Seller and the Depositor is duly qualified to do business, is
in good standing and has obtained all licenses, permits, charters,
registrations and approvals (together, "approvals") necessary for the
conduct of its business as currently conducted and as described in the
Offering Document and the performance of its obligations under the
Transaction Documents, in each jurisdiction in which the failure to be so
qualified or to obtain such approvals would render any Transaction
Document unenforceable in any respect or would have a material adverse
effect upon the Transaction, the Owners or the Insurer.
(b) Power and Authority. Each of the Seller and the Depositor have
all necessary corporate power and authority to conduct its business as
currently conducted and, as described in the Offering Document, to
execute, deliver and perform its obligations under the Transaction
Documents and to consummate the Transaction.
(c) Due Authorization. The execution, delivery, and performance of
the Transaction Documents by the Seller and the Depositor have been duly
authorized by all necessary corporate action and do not require any
additional approvals or consents, or other action by or any notice to or
filing with any Person, including, without limitation, any governmental
entity or the Seller's or the Depositor's stockholders, which have not
previously been obtained or given by the Seller or the Depositor.
(d) Noncontravention. Neither the execution and delivery of the
Transaction Documents by the Seller or the Depositor, the consummation of
the transactions contemplated thereby nor the satisfaction of the terms
and conditions of the Transaction Documents:
(i) conflicts with or results in any breach or violation of any
provision of the certificate of incorporation or bylaws of the Seller
or the Depositor or any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award currently in effect having
applicability to the Seller or the Depositor or any of its material
properties, including regulations issued by an administrative agency
or other governmental authority having supervisory powers over the
Seller and the Depositor;
(ii) constitutes a default by the Seller or the Depositor under
or a breach of any provision of any material loan agreement,
mortgage, indenture or other agreement or instrument to which the
Seller or the Depositor is a party or by which any of its or their
respective properties, which are individually or in the aggregate
material to the Seller or the Depositor, is or may be bound or
affected; or
(iii) results in or requires the creation of any lien upon or in
respect of any assets of the Seller or the Depositor, except as
contemplated by the Transaction Documents.
(e) Legal Proceedings. There is no action, proceeding or
investigation by or before any court, governmental or administrative
agency or arbitrator against or affecting the Seller or the Depositor or
any of its or their subsidiaries, or any properties or rights of the
Seller or the Depositor or any of its or their subsidiaries, pending or,
to the Seller's, and the Depositor's knowledge, threatened, which, in any
case, could reasonably be expected to result in a Material Adverse Change
with respect to the Seller or the Depositor.
(f) Valid and Binding Obligation. The Transaction Documents to which
either the Seller or the Depositor are a party constitute, and when
executed by the Seller and the Depositor (if not previously) will
constitute, the legal, valid and binding obligations of the Seller and the
Depositor, as applicable, enforceable against the Seller and the Depositor
in accordance with their respective terms, except as the enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or limiting creditors' rights generally or
general equitable principles, as such relate to the Seller or the
Depositor.
(g) Financial Statements. The Financial Statements supplied, or
publicly available, to the Insurer prior to the Date of Issuance (i)
present fairly the financial condition and results of operations of the
Seller and the Depositor as of the dates and for the periods indicated and
(ii) have been prepared in accordance with generally accepted accounting
principles consistently applied, except as noted therein and subject to
year-end adjustments with respect to interim statements. Since the date of
such Financial Statements, there has been no Material Adverse Change in
such condition or operations of the Seller or the Depositor.
(h) Compliance With Law, Regulations, Etc. Except as disclosed in
writing to the Insurer or in the Offering Document, neither the Seller nor
the Depositor has notice or any reason to believe that any practice,
procedure or policy employed by the Seller or the Depositor in the conduct
of its business violates, any law, regulation, judgment or agreement
applicable to the Seller or the Depositor which, if enforced, would have a
material adverse effect on the ability of the Seller or the Depositor to
perform its obligations under the Transaction Documents. Except as
disclosed in writing to the Insurer or in the Offering Document, neither
the Seller nor the Depositor is in breach of or in default under any
applicable law or administrative regulation of any department, division,
agency or instrumentality which has jurisdiction over it or any applicable
judgment or decree or any loan agreement, note, resolution, certificate,
agreement or other instrument to which the Seller or the Depositor is a
party or is otherwise subject which would have a material adverse affect
on its or their ability to perform under the Transaction Documents.
(i) Delivery of Information. None of the Transaction Documents nor
any other documents, reports, notices, operating agreements, schedules,
certificates, statements or other writings (collectively, the
"Documents"), furnished to the Insurer by the Seller or the Depositor on
or before the Date of Issuance contain any statement of a material fact by
the Seller or the Depositor which was untrue or misleading in any material
respect when made. Since the furnishing of the Documents but prior to the
offering of the Insured Certificates, there has been no change nor any
development or event involving a prospective change which would render any
of the Transaction Documents untrue or misleading in a material respect.
(j) Continuing Information. The Seller or the Depositor shall deliver
to the Insurer concurrently with the delivery thereof to the Trustee the
statements, notices, reports or other information required by the Trust
Agreement to be delivered to the Insurer or the Certificateholders. Upon
the request of the Insurer, the Depositor shall furnish, with reasonable
promptness, any Financial Statements or data regarding the Trust.
(k) Access to Records; Discussions With Officers and Accountants. The
Depositor shall, upon the request of the Insurer, permit the Insurer, or
its authorized agent, at reasonable times and upon reasonable notice, to
inspect, the Depositor's books and records as they may relate to the
Certificates, the Mortgage Loans and the Depositor's obligations under the
Transaction Documents and to discuss the Depositor's affairs, finances and
accounts with an appropriate authorized officer of the Depositor.
(l) Notice of Material Events. The Seller and the Depositor shall be
obligated (which obligation shall be satisfied as to each if performed by
the Seller or the Depositor) promptly to inform the Insurer in writing of
the occurrence of any of the following to the extent any of the following
relate to it:
(i) the submission of any claim or the initiation or threat of
any legal process, litigation or administrative or judicial
investigation or rule making or disciplinary proceeding in any
federal, state or local court or before any arbitration board, or any
such proceeding threatened by any government agency, which, if
adversely determined, would have a material adverse effect on the
Seller , the Depositor, the Owners or the Insurer or would result in
a Material Adverse Change with respect to the Seller or the
Depositor;
(ii) the occurrence of any Default or Event of Default or of any
Material Adverse Change;
(iii) the commencement of any proceedings by or against the
Seller or the Depositor under any applicable bankruptcy,
reorganization, liquidation, rehabilitation, insolvency or other
similar law now or hereafter in effect or of any proceeding in which
a receiver, liquidator, conservator, trustee or similar official
shall have been, or may be, appointed or requested for the Seller or
the Depositor or any of its or their assets; or
(iv) the receipt of notice that (A) the Seller or the Depositor
is being placed under regulatory supervision, (B) any license,
permit, charter, registration or approval necessary for the conduct
of the Seller or the Depositor business is to be or may be suspended
or revoked, or (C) the Seller or the Depositor is to cease and desist
any practice, procedure or policy employed by the Seller or the
Depositor in the conduct of its business, and such cessation may
result in a Material Adverse Change with respect to the Seller or the
Depositor.
(m) Impairment of Rights. The Seller and the Depositor shall not take
any action, if such action will have a material adverse effect on the
Insurer's ability to enforce its rights under the Trust Agreement, or this
Agreement; provided, however, that this Section 2.01 (m) shall not
prohibit the Seller or the Depositor from taking any action it is required
to take pursuant to the Transaction Documents, any applicable law or order
of any court or regulatory authority with jurisdiction over the Seller,
the Depositor, the Transaction Documents or the Certificates.
(n) Securities Law Compliance. The Seller and the Depositor each
represent and warrant that neither the offer nor the sale of the
Certificates to the Underwriter has been or will be in violation of the
Securities Act or any federal or state securities laws. The Seller and the
Depositor each further represents and warrants that it is not required to
be registered as an "investment company" under the Investment Company Act
of 1940, as amended.
(o) Transcripts. The Seller and the Depositor shall, within 90 days
following the closing of the Transaction, provide each of the Insurer and
its counsel a final transcript containing the documents and opinions
executed in connection with the Transaction.
(p) Transaction Documents. Each of the representations and warranties
of the Seller and the Depositor contained in the Transaction Documents is
true and correct in all material respects, and the Seller and the
Depositor hereby make each such representation and warranty to, and for
the benefit of, the Insurer as if the same were set forth in full herein.
(q) Solvency; Fraudulent Conveyance. The Seller and the Depositor are
solvent and will not be rendered insolvent by the Transaction and, after
giving effect to the Transaction, neither the Seller nor the Depositor
will be left with an unreasonably small amount of capital with which to
engage in its business, nor does the Seller or the Depositor intend to
incur, or believe that it has incurred, debts beyond its ability to pay as
they mature. Neither of the Seller nor the Depositor contemplates the
commencement of insolvency, bankruptcy, liquidation or consolidation
proceedings or the appointment of a receiver, liquidator, conservator,
trustee or similar official in respect of the Seller or the Depositor or
any of its or their assets. The amount of consideration being received by
the Depositor upon the sale of the Certificates to the Underwriter
constitutes reasonably equivalent value and fair consideration for the
interest in the Mortgage Loans evidenced by the Certificates. transferring
the Mortgage Loans to the Seller, the Seller is not transferring the
Mortgage Loans to the Depositor, the Depositor is not transferring the
Mortgage Loans to the Trust and the Depositor is not selling the
Certificates to the Underwriter, as provided in the Transaction Documents,
with any intent to hinder, delay or defraud any of the Seller's or the
Depositor's creditors.
(r) Compliance With Agreements and Applicable Laws. The Seller and
the Depositor shall comply in all material respects with the terms and
conditions of the Transaction Documents to which it is a party and shall
comply with all material requirements of any law, rule or regulation
applicable to it.
(s) Maintenance of Existence. The Seller and the Depositor, its or
their successors and assigns, shall maintain their corporate existence and
shall at all times continue to be duly organized under the laws of their
respective jurisdictions of organization and duly qualified and duly
authorized (as described in section 2.01(a), (b) and (c) hereof) and shall
conduct its business in accordance with the terms of its charter,
certificate or articles of incorporation and bylaws.
Section 2.02. REPRESENTATIONS, WARRANTIES AND COVENANTS OF TRUSTEE. The
Trustee represents and warrants to, as of the Date of Issuance, and covenants
with the other parties hereto as follows:
(a) Due Organization and Qualification. The Trustee is a national
banking association, duly organized, validly existing and in good standing
under the laws of the United States. The Trustee is duly qualified to do
business, is in good standing and has obtained all licenses, permits,
charters, registrations and approvals (together, "approvals") necessary
for the conduct of its business as currently conducted and as described in
the Offering Document and the performance of its obligations under the
Transaction Documents, in each jurisdiction in which the failure to be so
qualified or to obtain such approvals would render any Transaction
Document unenforceable in any respect or would have a material adverse
effect upon the Transaction, the Owners or the Insurer.
(b) Due Authorization. The execution, delivery and performance of the
Transaction Documents by the Trustee have been duly authorized by all
necessary action and do not require any additional approvals or consents,
or other action by or any notice to or filing with any Person, including,
without limitation, any governmental entity or the Trustee's stockholders,
which have not previously been obtained or given by the Trustee.
(c) Noncontravention. Neither the execution and delivery of the
Transaction Documents by the Trustee, the consummation of the transactions
contemplated thereby nor the satisfaction of the terms and conditions of
the Transaction Documents:
(i) conflicts with or results in any breach or violation of any
provision of the certificate or articles of incorporation or bylaws
of the Trustee or any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award currently in effect having
applicability to the Trustee or any of its material properties,
including regulations issued by an administrative agency or other
governmental authority having supervisory powers over the Trustee;
(ii) constitutes a default by the Trustee under or a breach of
any provision of any loan agreement, mortgage, indenture or other
agreement or instrument to which the Trustee is a party or by which
any of its or their respective properties, which are individually or
in the aggregate material to the Trustee, is or may be bound or
affected; or
(iii) results in or requires the creation of any lien upon or in
respect of any assets of the Trustee, except as contemplated by the
Transaction Documents.
(d) Legal Proceedings. There is no action, proceeding or
investigation by or before any court, governmental or administrative
agency or arbitrator against or affecting the Trustee, or any of its
subsidiaries, or any properties or rights of the Trustee, or any of its
subsidiaries, pending or, to the Trustee's knowledge after reasonable
inquiry, threatened, which, in any case, could reasonably be expected to
result in a Material Adverse Change with respect to the Trustee.
(e) Valid and Binding Obligations. The Insured Certificates, when
executed, authenticated and issued in accordance with the Trust Agreement,
and the Transaction Documents (other than the Insured Certificates) to
which it is a party, when executed and delivered by the Trustee, will
constitute the legal, valid and binding obligations of the Trustee, as
applicable, enforceable in accordance with their respective terms, except
as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and general equitable principles. The Trustee will not at
any time in the future deny that the Transaction Documents constitute the
legal, valid and binding obligations of the Trustee.
(f) Compliance With Law, Etc. No practice, procedure or policy
employed, or proposed to be employed, by the Trustee in the conduct of its
business violates any law, regulation, judgment, agreement, order or
decree applicable to any of them that, if enforced, could reasonably be
expected to result in a Material Adverse Change with respect to the
Trustee. The Trustee is not in breach of or in default under any
applicable law or administrative regulation of its respective jurisdiction
of incorporation, or any department, division, agency or instrumentality
thereof or of the United States or any applicable judgment or decree or
any loan agreement, note, resolution, certificate, agreement or other
instrument to which the Trustee is a party or is otherwise subject which,
if enforced, would have a material adverse effect on the ability of the
Trustee to perform its obligations under the Transaction Documents.
(g) Transaction Documents. Each of the representations and warranties
of the Trustee contained in the Transaction Documents is true and correct
in all material respects, and the Trustee hereby makes each such
representation and warranty to, and for the benefit of, the Insurer as if
the same were set forth in full herein.
(h) Compliance. The Trustee shall comply in all material respects
with the terms and conditions of the Transaction Documents to which it is
a party.
ARTICLE III
THE POLICY; REIMBURSEMENT; SECURITY
Section 3.01. AGREEMENT TO ISSUE THE POLICY. The Insurer agrees, subject
to the conditions set forth in Section 3.02 hereof, to issue the Policy on the
Date of Issuance.
Section 3.02. CONDITIONS PRECEDENT TO ISSUANCE OF THE POLICY. The Seller,
the Depositor and the Underwriter shall have complied with the terms and
satisfied the conditions precedent set forth below:
(a) the Underwriter shall have paid or caused to be paid that portion
of a non-refundable Premium, if any, payable on the Date of Issuance in
accordance with Section 3.03 hereof;
(b) the Seller and the Depositor shall have complied with all
requirements of the Commitment;
(c) the Insurer shall have received true and correct copies of any
governmental approvals necessary for the transactions contemplated by this
Agreement and the Trust Agreement or a certificate to the effect that no
such approvals are necessary;
(d) the Insurer shall have received a certificate of an authorized
officer of the Seller and the Depositor certifying the name and true
signatures of the officers of the Seller and the Depositor executing the
Transaction Documents; and
(e) the Insurer shall have received confirmation that the risk
secured by the Policy constitutes a "AAA" risk by S&P and at least "Aaa"
by ▇▇▇▇▇'▇ and that the Insured Certificates, when issued, will be rated
"AAA" by S&P without regard to the Policy.
Issuance of the Policy will be conclusive evidence of satisfaction or waiver
of any of the conditions set forth in this Section 3.02.
Section 3.03. PAYMENT OF FEES AND PREMIUM.
(a) In consideration of the issuance by the Insurer of the Policy,
the Insurer shall be entitled to receive a premium (the "Premium") in
accordance with the terms of the Commitment. The Premium shall be
calculated according to paragraph 1 of the Commitment. The Premium paid
hereunder shall be nonrefundable without regard to whether the Insurer
makes any payment under the Policy or any other circumstances relating to
the Insured Certificates or provision being made for payment of the
Insured Certificates prior to maturity. The Trustee shall make all
payments of Premium to be made by it by wire transfer to an account
designated by the Insurer by written notice to the Trustee.
(b) The Underwriter shall pay the fees of the Insurer's counsel in
connection with the Transaction, ▇▇▇▇▇'▇ fees for the shadow rating, S&P's
fees and the cost of obtaining the Insurer's accountant's consent letter.
Section 3.04. PAYMENT PROCEDURE. All payments to be made to the Insurer
under this Agreement shall be made to the Insurer in lawful currency of the
United States of America in immediately available funds at the notice address
for the Insurer as specified in the Trust Agreement on the date when due.
Payments to be made to the Insurer under this Agreement shall bear interest at
the Late Payment Rate from the date when due to the date paid, provided that
reimbursement to the Insurer of Insured Payments shall be made from the assets
of the Trust in accordance with the terms of the Trust Agreement at the Late
Payment Rate. If the Trustee is required to pay any amounts to the Insurer from
moneys available therefor under the Trust Agreement and the Trustee fails
timely to pay any such amount at a time when such moneys are available, the
Trustee shall, from the Trustee's own funds, reimburse the Seller or the
Depositor, as applicable, for any resulting penalty interest if the Trustee's
failure was due to negligence, bad faith or willful misconduct.
Section 3.05. REIMBURSEMENT AND ADDITIONAL PAYMENT OBLIGATION OF THE
SELLER AND THE DEPOSITOR.
(a) In accordance with the priorities established in Section 5.02 of
the Trust Agreement, the Insurer shall be entitled to reimbursement for
any payment made by the Insurer under the Policy, which reimbursement
shall be due and payable on the date that any amount is to be paid
pursuant to a Notice (as defined in the Policy), in an amount equal to the
amount to be so paid and all amounts previously paid that remain
unreimbursed, together with interest on any and all amounts remaining
unreimbursed (to the extent permitted by law, if in respect of any
unreimbursed amounts representing interest) from the date such amounts
became due until paid in full (after as well as before judgment), at a
rate of interest equal to the Late Payment Rate.
(b) Notwithstanding anything in Section 3.03(a) to the contrary, the
Seller agrees to reimburse the Insurer for payments made under the Policy
arising as a result of the applicable Seller's failure to repurchase any
Mortgage Loan required to be repurchased pursuant to Section 1.04 of the
Mortgage Loan Sale and Assignment Agreement, together with interest on any
and all amounts remaining unreimbursed (to the extent permitted by law, if
in respect of any unreimbursed amounts representing interest) from the
date such amounts became due until paid in full (after as well as before
judgment), at a rate of interest equal to the Late Payment Rate.
(c) The Seller and the Depositor each agree to reimburse the Insurer,
immediately upon receipt of two Business Days' prior written notice, for
any and all charges, fees, costs and expenses that the Insurer may
reasonably pay or incur including, but not limited to, reasonable
attorneys' and accountants' fees and reasonable expenses, in connection
with (a) the enforcement, defense or preservation of any rights in respect
of any of the Transaction Documents, including defending or participating
in any litigation or proceeding (including any insolvency or bankruptcy
proceeding in respect of any Transaction participant or any affiliate
thereof) relating to any of the Transaction Documents, any party to any of
the Transaction Documents, in its capacity as such a party, or the
Transaction, provided that the foregoing arises out of the Seller's or the
Depositor's breach or alleged breach of its or their obligations under the
applicable Transaction Document or (b) any amendment of any Transaction
Document, whether or not executed or completed.
(d) The Seller and the Depositor agree to pay to the Insurer as
follows: any payments made by the Insurer on behalf of, or advanced to the
Seller or the Depositor, respectively, including, without limitation, any
amounts payable by the Seller or the Depositor pursuant to the
Certificates or any other Transaction Documents.
All such amounts are to be immediately due and payable without demand.
Section 3.06. INDEMNIFICATION BY THE SELLER AND THE DEPOSITOR.
(a) In addition to any and all rights of indemnification or any other
rights of the Insurer pursuant hereto or under law or equity, the Seller
and the Depositor and any successors thereto agree to pay, and to protect,
indemnify and save harmless, the Insurer and its officers, directors,
shareholders, employees, agents and each person, if any, who controls the
Insurer within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act from and against any and all
claims, losses, liabilities (including penalties), actions, suits,
judgments, demands, damages, costs or reasonable expenses (including,
without limitation, reasonable fees and expenses of attorneys, consultants
and auditors and reasonable costs of investigations) or obligations
whatsoever paid by the Insurer (herein collectively referred to as
"Liabilities") of any nature arising out of or relating to the
transactions contemplated by the Transaction Documents by reason of:
(i) any act or omission of the Seller or the Depositor, or the
allegation thereof, in connection with the offering, issuance, sale
or delivery of the Certificates other than by reason of false or
misleading information provided by the Insurer in writing for
inclusion in the Offering Document, which is contained in the caption
"The Class 2-A3 Certificate Insurance Policy" of the Offering
Document;
(ii) the misfeasance or malfeasance of, or negligence or theft
committed by, any director, officer, employee or agent of the Seller
or the Depositor;
(iii) the violation by the Seller or the Depositor of any
federal or state securities, banking or antitrust laws, rules or
regulations in connection with the issuance, offer and sale of the
Certificates or the transactions contemplated by the Transaction
Documents;
(iv) the violation by the Seller or the Depositor of any federal
or state laws, rules or regulations relating to the Transaction,
including without limitation the maximum amount of interest permitted
to be received on account of any loan of money or with respect to the
Mortgage Loans;
(v) the breach by the Seller or the Depositor of any of its
obligations under this Insurance Agreement or any of the other
Transaction Documents; and
(vi) the breach by the Seller or the Depositor of any
representation or warranty on the part of the Seller or the Depositor
contained in the Transaction Documents or in any certificate or
report furnished or delivered to the Insurer thereunder.
This indemnity provision and the provisions in Section 3.05 shall
survive the termination of this Insurance Agreement and shall survive
until the statute of limitations has run on any causes of action which
arise from one of these reasons and until all suits filed as a result
thereof have been finally concluded.
(b) Each of the Seller and the Depositor agree to pay to the Insurer
interest on any and all amounts required to be paid by the Seller or the
Depositor, including but not limited to those amounts described in Section
3.05 and this Section 3.06, from the date payable until payment thereof is
made in full. Such interest shall be payable at the Late Payment Rate per
annum.
ARTICLE IV
FURTHER AGREEMENTS
Section 4.01. EFFECTIVE DATE; TERM OF AGREEMENT. This Agreement shall take
effect on the date on which the Policy is issued and shall remain in effect
until such time as the Insurer is no longer subject to a claim under the Policy
and all amounts payable by the Seller or the Depositor hereunder or under the
Trust Agreement and under the Certificates have been paid in full; provided,
however, that the provisions of Sections 3.05 and 3.06 shall survive any
termination of this Agreement.
Section 4.02. WAIVER OF RIGHTS FURTHER ASSURANCES.
(a) Excepting at such times as a default in payment under the Policy
shall exist or shall have occurred, none of the Trustee, the Seller or the
Depositor shall grant any waiver of rights under any of the Transaction
Documents to which any of them is a party without the prior written
consent of the Insurer, (unless such waiver is expressly permitted in the
applicable Transaction Document) and any such waiver without the prior
written consent of the Insurer shall be null and void and of no force or
effect.
(b) To the extent permitted by law, the Trustee, the Seller and the
Depositor agree that they will, from time to time, following good faith
negotiations in connection therewith, execute, acknowledge and deliver, or
cause to be executed, acknowledged and delivered, such supplements hereto
and such further instruments as the Insurer may request and as may be
required in the Insurer's judgment to effectuate the intention of or
facilitate the performance of this Insurance Agreement.
Section 4.03. OBLIGATIONS ABSOLUTE. The obligations of the Seller, the
Depositor and the Trustee hereunder shall be absolute and unconditional, and
shall not be subject to, and the Seller, the Depositor and the Trustee hereby
waive (a) presentment and demand for payment, (b) notices in connection with
delivery and acceptance hereof or notices in connection with performance,
default or enforcement of payment hereunder and (c) its rights of, abatement,
diminution, postponement or deduction, or to any defense other than payment, or
to any right of setoff or recoupment arising out of any breach under any of the
Transaction Documents, by any party thereto or any beneficiary thereof, or out
of any obligation at any time owing to the Seller, the Depositor or the
Trustee. Nothing herein shall be construed as prohibiting the Seller, the
Depositor or the Trustee from pursuing any rights or remedies it may have
against any other person or entity in a separate legal proceeding. The
obligations of the Seller, the Depositor and the Trustee hereunder are absolute
and unconditional and will be paid or performed strictly in accordance with
this Agreement.
Section 4.04. ASSIGNMENTS; REINSURANCE; THIRD-PARTY RIGHTS.
(a) This Agreement shall be a continuing obligation of the Seller and
the Depositor and shall (i) be binding upon the Seller and the Depositor,
its or their successors and assigns and (ii) inure to the benefit of and
be enforceable by the Insurer and its successors, transferees and assigns.
Neither the Seller nor the Depositor may assign this Agreement, or
delegate any of its rights or obligations hereunder, without the prior
written consent of the Insurer.
(b) The Insurer shall have the right to give participations in its
rights under this Agreement and to enter into contracts of reinsurance
with respect to the Policy and each such participant or reinsurer shall be
entitled to the benefit of any representation, warranty, covenant and
obligation of the Seller or the Depositor hereunder as if such participant
or reinsurer was a party hereto; provided that no such grant of
participation shall operate to relieve the Insurer of any of its
obligations hereunder or under the Policy.
(c) In addition, the Insurer shall be entitled to assign or pledge to
any bank or other lender providing liquidity or credit with respect to the
Transaction or the obligations of the Insurer in connection therewith any
rights of the Insurer under the Transaction Documents or with respect to
any real or personal property or other interests pledged to the Insurer,
or in which the Insurer has a security interest, in connection with the
Transaction.
(d) Except as provided herein with respect to participants and
reinsurers, nothing in this Agreement shall confer any right, remedy or
claim, express or implied, upon any person, including, particularly, any
Holder of a Certificate, other than the Insurer, against the Seller and
the Depositor and all the terms, covenants, conditions, promises and
agreements contained herein shall be for the sole and exclusive benefit of
the parties hereto and their successors. Neither the Trustee nor any
Holder of a Certificate shall have any right to payment from the premium
paid pursuant to Section 3.03 hereof.
Section 4.05. LIABILITY OF INSURER.The Insurer shall not be responsible
for any act or omission of the Trustee with respect to its use of the Policy.
Neither the Insurer nor any of its officers, directors or employees shall be
liable or responsible for: (a) the use which may be made of the Policy by or
for any acts or omissions of the Trustee in connection therewith; or (b) the
validity, sufficiency, accuracy or genuineness of documents, or of any
endorsement(s) thereon, submitted by any person in connection with a claim
under the Policy, even if such documents should in fact prove to be in any or
all respects invalid, insufficient, fraudulent or forged, unless the Insurer
has actual knowledge thereof. In furtherance and not in limitation of the
foregoing, the Insurer may accept documents that appear on their face to be in
order, without responsibility for further investigation.
Section 4.06. SUBROGATION. To the extent of any payments under the Policy,
the Insurer shall be fully subrogated to any remedies against the Seller or the
Depositor or in respect of the Mortgage Loans available to the Trustee under
the Trust Agreement. The Trustee acknowledges such subrogation and, further,
agrees to execute such instruments prepared by the Insurer and to take such
reasonable actions as, in the sole judgment of the Insurer, are necessary to
evidence such subrogation and to perfect the rights of the Insurer to receive
any moneys paid or payable under the Trust Agreement.
ARTICLE V
DEFAULTS; REMEDIES
Section 5.01. DEFAULTS. The occurrence of any of the following events
shall constitute an Event of Default hereunder:
(a) any representation or warranty made by the Seller or the
Depositor under this Agreement shall prove to be untrue or incomplete in
any material respect; provided, however, that if the Seller or the
Depositor effectively cures any such defect in any representation or
warranty under such agreement within the time period specified in such
agreement as the cure period therefor, such defect shall not in and of
itself constitute an Event of Default hereunder; or
(b) either the Seller or the Depositor shall fail to pay to the
Insurer when due any amount payable by the Seller or the Depositor under
this Agreement, or the Trust Agreement, unless such amounts are paid in
full within the applicable cure period explicitly provided for under such
agreement; or
(c) the occurrence of an Event of Default under Section 10.01 of the
Servicing Agreement (as defined therein).
Section 5.02. REMEDIES; NO REMEDY EXCLUSIVE.
(a) Upon the occurrence of an Event of Default, the Insurer may
exercise any one or both of the rights and remedies set forth below:
(i) exercise any rights and remedies under this Agreement or the
Trust Agreement, as applicable, in accordance with their terms; or
(ii) take whatever action at law or in equity as may appear
necessary or desirable in its judgment to collect the amounts then
due and thereafter to become due under this Agreement, or to enforce
performance and observance of any obligation, agreement or covenant
of the Seller or the Depositor under this Agreement or the Trust
Agreement, as applicable.
(b) Unless otherwise expressly provided, no remedy herein conferred
upon or reserved is intended to be exclusive of any other available
remedy, but each remedy shall be cumulative and shall be in addition to
other remedies given under the Transaction Documents or existing at law or
in equity. No delay or omission to exercise any right or power accruing
under the Transaction Documents upon the happening of any event set forth
in Section 5.01 hereof shall impair any such right or power or shall be
construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient. In
order to entitle the Insurer to exercise any remedy reserved to the
Insurer in this Article, it shall not be necessary to give any notice,
other than such notice as may be expressly required in this Article.
Section 5.03. WAIVERS.
(a) No failure by any of the parties to exercise, and no delay by any
of the parties in exercising, any right hereunder shall operate as a
waiver thereof. The exercise by any of the parties of any right hereunder
shall not preclude the exercise of any other right, and the remedies
provided herein to each of the parties are declared in every case to be
cumulative and not exclusive of any remedies provided by law or equity.
(b) The Insurer shall have the right, to be exercised in its complete
discretion, to waive any Event of Default hereunder, by a writing setting
forth the terms, conditions and extent of such waiver signed by the
Insurer and delivered to the Seller and the Depositor. Unless such writing
expressly provides to the contrary, any waiver so granted shall extend
only to the specific event or occurrence which gave rise to the Event of
Default so waived and not to any other similar event or occurrence which
occurs subsequent to the date of such waiver.
ARTICLE VI
MISCELLANEOUS
Section 6.01. AMENDMENTS, CHANGES AND MODIFICATIONS. This Agreement may be
amended, changed, modified, altered or terminated only by written instrument or
written instruments signed by the Insurer, the Trustee, the Seller and the
Depositor. The Seller, the Depositor and the Insurer also agree to provide
prior written notification to ▇▇▇▇▇'▇ and S&P of any amendment to this
Agreement.
Section 6.02. NOTICES. All demands, notices and other communications to be
given hereunder shall be in writing (except as otherwise specifically provided
herein) and shall be mailed by registered mail or personally delivered or
telecopied to the recipient as follows:
(a) To the Insurer:
MBIA Insurance Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Insured Portfolio Management-Structured
Finance (IPM-SF)
First Nationwide Trust 1999-1 Structured
Asset Securities Corporation
Mortgage Pass-Through Certificates,
Series 1999-1 Class 2-A3 Certificates
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
(in each case in which notice or other
communication to the Insurer refers to an Event of
Default, a claim on the Policy or with respect to
which failure on the part of the Insurer to respond
shall be deemed to constitute consent or
acceptance, then a copy of such notice or other
communication should also be sent to the attention
of each of the general counsel and the Insurer and
shall be marked to indicate "URGENT MATERIAL
ENCLOSED.")
(b) To the Depositor:
Structured Asset Securities Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ Floor
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Structured Finance/ SASCO 1999-1
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation: 212-526-7000
(c) To the Trustee:
U.S. Bank National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Structured Finance (First Nationwide Trust 1999-1/
Sasco1999-1)
(d) To the Seller:
▇▇▇▇▇▇ Capital
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇/▇▇▇▇▇▇ Brothers (Legal)
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation: 212-526-7000
Section 6.03. SEVERABILITY. In the event any provision of this Agreement
shall be held invalid or unenforceable by any court of competent jurisdiction,
the parties hereto agree that such holding shall not invalidate or render
unenforceable any other provision hereof. The parties hereto further agree that
the holding by any court of competent jurisdiction that any remedy pursued by
any party hereunder is unavailable or unenforceable shall not affect in any way
the ability of any party to pursue any other remedy available to it.
Section 6.04. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED,
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 6.05. CONSENT TO JURISDICTION AND VENUE, ETC. The parties hereto
irrevocably (i) agree that any suit, action or other legal proceeding arising
out of or relating to this Agreement may be brought in a court of record in the
Borough of Manhattan, City of New York, State of New York or in the Courts of
the United States of America located in such state, (ii) consent to the
jurisdiction of each such court in any such suit, action or proceeding and
(iii) waive any objection which it may have to the laying of venue of any such
suit, action or proceeding in any of such courts and any claim that any such
suit, action or proceeding has been brought in an inconvenient forum.
Nothing in this Section 6.05 shall limit or affect the right of the
Insurer to serve legal process in any manner permitted by law or to start legal
proceedings relating to any Transaction Document against any party hereto or
its or their respective property in the courts of any jurisdiction.
Section 6.06. CONSENT OF INSURER. In the event that the Insurer's consent
is required under the terms hereof or any term of the Trust Agreement, it is
understood and agreed that, except as otherwise provided expressly herein or
therein, the determination whether to grant or withhold such consent shall be
made solely by the Insurer in its absolute discretion. The Insurer hereby
agrees that it will respond to any request for consent in a timely manner,
taking into consideration the business of the Depositor.
Section 6.07. COUNTERPARTS. This Agreement may be executed in counterparts
by the parties hereto, and each such counterpart shall be considered an
original and all such counterparts shall constitute one and the same
instrument.
Section 6.08. HEADINGS. The headings of sections contained in this
Agreement are provided for convenience only. They form no part of this
Agreement and shall not affect its construction or interpretation. All
references to sections or subsections of this Agreement refer to the
corresponding sections or subsections of this Agreement.
Section 6.09. WAIVER OF TRIAL BY JURY. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT IT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT, AMONG OTHER THINGS, THIS WAIVER.
Section 6.10. ENTIRE AGREEMENT. This Agreement and the Policy set forth
the entire agreement between the parties with respect to the subject matter
thereof, and this Agreement supersedes and replaces any agreement or
understanding that may have existed between the parties prior to the date
hereof in respect of such subject matter.
Section 6.11. THIRD PARTY BENEFICIARY. Each of the parties hereto
acknowledges that the Insurer shall be an express third party beneficiary of
the Trust Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, all
as of the day and year first above mentioned.
MBIA INSURANCE CORPORATION
By /s/ ▇▇▇▇ ▇ ▇▇▇▇▇▇
----------------------------------
Title Assistant Secretary
STRUCTURED ASSET SECURITIES COPORATION,
as Depositor
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Title Managing Director
▇▇▇▇▇▇ CAPITAL, as Seller
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title Authorized Signatory
U. S. BANK NATIONAL ASSOCIATION, as Trustee
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇-▇▇▇▇
----------------------------------
Title Assistant Vice President
FIRST NATIONWIDE 1999-1
Structured Asset Securities Corporation
Mortgage Pass-Through Certificates, Series 1999-1
INSURANCE AGREEMENT
SIGNATURE PAGE